Most families who hire nannies think of themselves as good employers. They pay on time, they’re kind, they genuinely like the person working in their home. And then they find out they’ve been violating federal labor law for two years.
This isn’t malicious. It’s ignorance, and it’s incredibly common. Household employment operates under the same labor laws as corporate employment, but nobody hands families an HR manual when they bring someone into their home. You figure it out as you go, and what you don’t know can create real legal exposure.
Here’s what actually matters.
Overtime is not optional. The Fair Labor Standards Act covers domestic workers, and it means that any nanny working more than 40 hours in a week is owed overtime pay at 1.5 times their regular rate. Not their rate “when overtime comes up” but their actual hourly rate times 1.5. Families who pay a flat weekly salary without accounting for overtime hours are often breaking the law, even when they’re paying above market. If your nanny regularly works 50-hour weeks and you’re paying the same amount regardless, you owe back wages. This is not a gray area.
Guaranteed hours are a contract issue, not a nicety. Most professional work agreements include a guaranteed minimum – typically 40 or 45 hours per week regardless of whether the family actually needs those hours that week. This matters because nannies are employed workers, not on-call contractors. They’ve turned down other work to be available to your family. When you send someone home early three days in a row because things are quiet, you’re unilaterally cutting their income. Guaranteed hours protect against that. Whether you’re legally required to offer them depends on what’s in your work agreement – which is exactly why a written work agreement matters.
Written work agreements are not bureaucratic overkill. California, New York, and a growing number of states either require written employment agreements for household workers or strongly recommend them as protection for both parties. Even where not required by law, an agreement that spells out schedule, compensation, overtime, PTO, holiday observance, guaranteed hours, and termination terms prevents the vast majority of disputes before they start. Families who operate on handshakes often find that what they thought was agreed on and what the nanny understood to be agreed on are two entirely different things. Writing it down isn’t about distrust. It’s about making sure you both mean the same thing.
Termination has real-world implications. At-will employment means either party can end the arrangement, but it doesn’t mean either party can end it without consequence. Most professional nanny arrangements include notice periods – two weeks minimum, a month for long-tenured staff. Letting someone go with no notice and no severance might be legal in your state, but it leaves someone without income immediately and tends to produce exactly the kind of outcomes families want to avoid: EEOC complaints, wage claims, bad references flowing in both directions. Reasonable severance and proper notice aren’t required everywhere, but they’re standard professional practice for a reason.
Sick leave laws are changing fast. Domestic workers are now covered by paid sick leave requirements in many states, including California, New York, Washington, and Illinois. If your nanny is in one of those states and you haven’t been providing any paid sick time, you may have been out of compliance without knowing it. Check the current requirements in your state and make sure you’re current. This area of law has moved quickly over the past several years and continues to expand.
The cash payment problem. Paying a nanny in cash without tax withholding isn’t a workaround – it’s illegal for both the family and, in many cases, the nanny. Families who do this expose themselves to back taxes, penalties, and interest if audited. They also leave their nanny without Social Security contributions, unemployment insurance, and documented income for things like loans or visa renewals. The fact that cash arrangements are common doesn’t make them legal. Families who discover their nannies have been cash employees for years often face significant liability.
None of this is meant to be alarming. Most issues in household employment law are correctable when caught early. But the families who catch them early are usually the ones who asked questions upfront, put things in writing, and ran their nanny’s compensation through a payroll service rather than treating it like paying a babysitter.
If you’re unsure whether your arrangement is compliant, the cost of a one-hour conversation with an employment attorney familiar with domestic workers is substantially less than the cost of finding out you’ve been wrong for three years.
